Rare Coin Terminology

Third – Party Grading And Authentication

Third-Party Grading (TPG) is a service provided for a fee, an impartial, independent opinion of a coin’s grade and authenticity. The grader is neither buyer nor seller, and has no biased interest in the coin’s market value. Third-party grading started in the late 1970s with ANACS (then a service of the American Numismatic Association; now privately owned and operated). ANACS graders would examine a coin and, after determining its authenticity, would assign separate grades to its obverse and reverse (such as MS-63/65) and return it to the sender, along with a certificate
and photograph.

In 1986 a group of coin dealers launched the Professional Coin Grading Service (PCGS), which grades coins for a fee and hermetically seals them in plastic holders with interior labels. This “slabbing” helps guarantee that a coin and its grade certificate cannot be separated. In 1987 Numismatic Grading Corporation of America (NGC) was started, offering a similar encapsulation service. Both companies guarantee the authenticity and grades of the coins they certify. Coins are judged by consensus, with the graders having no knowledge of who submitted them.

Anatomy of a Certified Coin

Today the hobby’s leading third-party grading firms are NGC (Sarasota, Florida) and PCGS (Newport Beach, California).

Professional grading strives to be completely objective, but coins are graded by humans and not computers. This introduces a subjective element of art as opposed to science. Within a given grade, a keen observer will find coins that are low-quality, average, and high-quality for that grade. Such factors as luster, color, strength of strike, and overall eye appeal can make, for example, one MS-65 1891 Morgan dollar more visually attractive than another with the same grade. 

ARCI selects coins based on their level of quality for the grade – in other words, we buy the coin, not the holder. This gives the smart collector the opportunity to “cherry-pick,” or examine multiple slabbed coins and select the highest-quality coin for the desired grade. This process builds a better collection than simply accepting a TPG’s assigned grades, and is summed up in the guidance of “Buy the coin, not the slab.” For example, a certified coin in MS-64 might have greater eye appeal – and therefore be more desirable to a greater number of collectors – than a less attractive coin graded MS-65.

 
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